Consumer confidence index in Israel at the lowest level affected by the Gaza war economy

The Consumer confidence index in Israel for the year 2024 has registered its lowest level since its calculation in March 2011, when the annual average declined to “-27%” compared to “-21%” in 2023, which reflects the escalation of the state of economic pessimism among citizens, according to Calist.

The report, issued by the Central Bureau of Statistics, explained that this sharp decline makes the year 2024 the most negative since the start of the index’s measure, even in comparison with the Corona pandemic period, which witnessed higher levels of confidence between consumers.

The index, which ranges between “-100” and “+100”, depends on the evaluation of citizens of the general economic situation, their future expectations, and their plans on savings and spending on major purchases. The negative values ​​of the index indicate increasing pessimism, while the values ​​close to zero reflect the case of The anticipation without expecting a fundamental change in economic conditions.

Gaza war

Consumer confidence is an important measure that reflects the optimism or pessimism of individuals over the current and future economic conditions. The decrease in this indicator in Israel during the past year reflects the negative influence of consumer morale due to the war launched by Israel on the Gaza Strip since October 2023, and led to internal crises in various directions, and therefore this may undoubtedly reduce consumer spending and its impact on Economic growth.

The deterioration of economic expectations and consumption

According to the data published by the Statistics Authority, the expectations about the general economic situation for the next year witnessed a sharp decrease to “-45%”, which is the lowest level since the start of the index began, compared to the long-term rate of “-22%”, which indicates a double pessimistic state between Individuals.

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Also, the index related to the forecasts of the economic situation of the families fell to “-9%”, which is its lowest level since 2013, when it reached “-10%”, and the captivity of the families for their financial situation decreased during the past year to “-21%”, which is the lowest Since 2013 also.

As for the intentions of individuals regarding spending on major purchases, the index has decreased to “-32%”, which is the lowest level since its measuring in 2011, which reflects the reluctance of consumers from great spending as a result of lack of confidence in the economic future.

In addition, the data of the relative consumer confidence index, which compares the levels of confidence in the previous periods, showed that last year recorded its lowest value ever, as the annual average fell to 48 points, compared to 70 points in 2023, and 119 points in 2021, indicating that indicates A noticeable deterioration in consumer confidence compared to previous periods.

Reflections on the Israeli economy

The consumer confidence index plays a major role in predicting the economic movement, as it is considered a pre -emptive indicator of economic changes before it is reflected in the data of GDP or unemployment rates. It also affects economic policies, as decision makers help assess the need for economic interventions to stimulate the economy, as well as being an important tool for investors and companies to make strategic decisions based on consumer confidence.

Despite the sharp decline in consumer confidence, stock markets increased by 29% during the year 2024, in addition to an increase in individual consumption by 2.6%. However, this rise in consumption was concentrated in perennial and semi -perennial goods, while the consumption of services for the individual decreased by 1%, which reflects the tendency of families towards spending on concrete goods at the expense of services in periods of economic uncertainty.

Thus, in 2024, it emerges as an unprecedented period of economic pessimism in Israel, which reflects the increasing concern about the future of the local economy, which may have repercussions on economic policies and investments in the coming period.